This week we're going to talk about various aspects of house flipping and give you some basic guidance. Today we'll start with the first step you need to take if you're interested in flipping houses: finding deals. I've talked about this before, but I want to make sure you have a good foundation. A lot of people will give you different advice and a lot of it will work, but this episode will teach you the basics and help you get started.
My opinion is that the best place to start if you're new if to find a good, investor-friendly realtor. Not every realtor is investor-friendly, so think of meeting an realtor as an interview. Meet a few and make sure the one you work with understands what you're looking for. A lead that's solid for a realtor is not necessarily a good deal for an investor. Sometimes realtors have a hard time understanding that difference, so you need to educate them and teach them to look for what's important for you. They need to look at the After Repair Value and calculate the numbers of a potential lead the way you would, taking into account every possible cost including commissions, closing costs, renovation costs, holding costs, and even potential seller concessions. So to find a good deal, find a realtor who understands the way you need to work and who is ok with putting in a lot of low offers.
Another way to find deals is direct marketing. To do that you're going to have to spend some money upfront. You're going to buy a list, send out postcards and letters, and have a way to respond to calls. I'll probably do a show in the future with more detailed information on that, but feel free to email me if you need guidance.
You can also just talk to people in order to find deals. Go to RIA meetings, meet wholesalers and other house-flippers, talk to your friends and family. Network as much as you can so that people send you deals when they stumble upon something.
The cheapest way to find deals is to drive for dollars, which means driving through your target area and looking for houses that seem to be in disrepair.
All of these ways are solid and you can build a business on them. Finding a good deal is the first and hardest step, but get out there and use one these techniques today!
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